Running a small business can be tough, frustrating, and requires most owners to wear multiple hats.
While most owners are comfortable being involved in sales, marketing, production and even HR, many feel completely out of their element when it comes to financing. While this is an area that’s typically better left to those with the necessary training and experience there are some basic things that every startup business owner should do in order to keep their company in the black.
Use dedicated business accounts
For your small business to thrive, it’s essential that you’re able to accurately track all of your business income and expenditures. To help you do this, you need to set up dedicated banking and credit card accounts for your small business and ensures there is no overlap between them and your personal accounts.
Have a budget and stick to it
You probably already have a personal budget. Keeping one helps you to prioritize expenses by separating needs from the wants. The same applies to your small business. Having a formal budget helps you prioritize your spending.
Prepare for big expenses
Don’t wait to be taken by surprise just because you underestimated your expenses. When creating your budget, it’s always best to overestimate your expenses a little in order to cover any unexpected cost increases and incidentals.
Be prepared for downturns and bottlenecks
Every small business has its ups and downs. For some, the reason is seasonal factors that influence their market. For others, slow-paying customers can have a negative impact on cash flow. While seasonal fluctuations are easy to anticipate, cash flow problems can arise quickly and unexpectedly. When they do, having an established relationship with a lender can be a lifesaver. If borrowing from a traditional lender isn’t an option, you might consider invoice factoring to get the cash you need to meet your daily operating expenses during the slow times and to invest in new equipment, warehouse space or personnel.
Ask for professional help
Sometimes managing big numbers, accounts and cash flow can be overwhelming. Don’t be afraid to ask for help. Trying to muddle through can be disastrous for your business.
Have alternative investments
Don’t put all your eggs in one basket. Diversifying your investments will boost your savings plan while at the same time providing you with something to fall back on.
Manage your time
You’ve no doubt heard the saying “time is money”. The amount of time you put into your small business is directly proportional to how well and how quickly it will succeed.
Create a savings plan
Finally, the joy of every business owner is when you start making a profit out of your hard work. Being able to constantly and progressively save up is proof that your business is not hopeless after all. What’s more, savings are like water you store to be used in times of drought. A healthy savings account can get your small business through economic downturns, the loss of clients and other unexpected events.
Call American Receivable at about invoice factoring 1-800-297-6652 or visit us online at www.americanreceivable.com to learn more about invoice factoring and whether it’s the right solution for your cash flow needs.